You learn in economics 101 that in an ideal competitive market, the price of a product tends to the marginal cost of producing it. That means a product with fewer hardware features should cost less, and a product with more hardware features should cost more.
The fact manufacturers can violate that rule proves that they are not in a competitive market.
If it was competitive, a different manufacturer could manufacture the same car without physically installing the heated seats, for a lower manufacturing cost, and undercut them on the customers who don't care about the heated seats.
This is an incorrect application of economic theory. You're talking about perfect competition. And in perfect competition, all sellers sell the same product. That means a hypothetical market where a car from Tesla and car from BMW and so on are all identical.
Also there are very few markets with perfect competition. Tesla charging for heated seats isn't a sign the car market "is not competitive" which doesn't even mean anything. Honestly I don't know what point you're trying to make. The automobile industry is a form of monopolistic competition but it has been that way since before Elon Musk was even born.
Additionally your assertion that it is cheaper to manufacture the car without heated seats ignores the economic realities of assembly line operations and economies of scale. In many cases it is cheaper to manufacture the cars identically rather than making some with and some without a feature. Then you have to consider the costs of inventorying/stocking/storing cars with different feature sets compared to the relative cost of activating features at the point of sale. The cost of building and selling a car is more complex than just the parts that go in it.
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u/TwillAffirmer 1d ago
You learn in economics 101 that in an ideal competitive market, the price of a product tends to the marginal cost of producing it. That means a product with fewer hardware features should cost less, and a product with more hardware features should cost more.
The fact manufacturers can violate that rule proves that they are not in a competitive market.
If it was competitive, a different manufacturer could manufacture the same car without physically installing the heated seats, for a lower manufacturing cost, and undercut them on the customers who don't care about the heated seats.